Alphabet reported Q2 revenue of $96.43 billion, surpassing Wall Street estimates due to substantial cloud computing demand. Google Cloud revenue surged nearly 32%, exceeding predictions and bolstered by new AI offerings. Capital expenditures rose to approximately $85 billion, reflecting the growing demand for cloud services and AI development. Although shares initially dipped after the earnings report, they recovered on the strength of cloud performance. Despite trailing behind AWS and Azure, Google aims to enhance its market position with AI capabilities.
"With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures." CEO Sundar Pichai said in an earnings release.
"I don't think anyone was expecting a change to that 2025 capex guide," said Dave Wagner, portfolio manager at Aptus Capital Advisors. "Google had an amazing quarter. It was an easy beat, and it was just offset by this $10-billion increase in capex."
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